A.

ORGANIZATION OF THE ESTIMATING FUNCTION

Estimating staff structure for medium sized company :

Managing Director

Admin - Commercial - Procurement - Construction - Finance

Business Dev - Estimating - Purchasing

Chief Estimator

Senior Estimator

Junior Estimators

Estimator’s Assistant

The aim of the estimating team is to gain an understanding of the technical, financial
and contractual requirements of the project in order to produce a professional technical
document with a realistic prediction of the cost for the construction of the project.

The Chief Estimator needs to be sure that there is a reasonable chance of winning the
contract if there are other tenderers involved.

The decision to proceed with a tender is based on many factors :

1. the estimating resources available
2. extent of competition
3. tender period
4. quality of tender documents
5. type of work
6. location
7. current construction workload
8. conditions of contract.

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Taking these points in consideration, the estimator can decline a number of invitations to
tender in order to ;
1. maintain a high success rate
2. avoid uncompetitive bids which can lead to exclusion from approved lists
3. waste estimating resources on tenders.

The estimator must however recognize the goodwill which flows from submitting
competitive prices and the need to carry out work which might lead to suitable and
profitable other contracts.

The skills needed by the estimator are :

1. the ability to read and interpret technical documentation
2. the ability to communicate with clients, sub-contractors, suppliers, specialists and
other members of the team
3. the ability to make accurate calculations.

Technically an estimator must have :

1. a working knowledge of all the major trades
2. be able to identify packages of work to be carried out by sub-contractors and the
direct workforce
3. to foresee the time and resources that will be needed
4. the ability to take-off quantities from drawings where there are no BoQ
5. when tendering on BoQ – check the principal quantities to understand the corrections
to the quantities during the contract that will effect the profitability.

The work of the estimating department is an important part of the company’s quality
management system. Decisions made at tender stage will often determine the way in
which the project is carried out. It’s therefore important when preparing a tender to
ensure that the client’s requirements are understood.

The objective of a quality assurance system is to provide confidence that the tender to
be submitted is :
1. correct
2. provided on time
3. produces the right price.

The benefits of implementing quality assurance in the estimating function are :

1. PROFITABILITY – improved profitability of the company
2. ACCURACY – reduction of errors
3. COMPETENCE – better trained staff
4. EFFICIENCY – work properly planned and systematically carried out
5. JOB SATISFACTION – for the whole estimating team
6. CLIENT SATISFACTION – leading to likelihood of new contracts.

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B. PROCUREMENT PATHS

Clients’ needs

Clients usually identify there needs in terms of commercial or social pressure to change
with primary objectives such as :
1. space requirements : the need to improve production levels, add to production
capacity, accommodate new processes or provide domestic or social accommodation
2. investment : to exploit opportunities to invest in buildings
3. identity : to enhance the client’s standing in its market or society
4. location : could lead to a better use of resources, capture a new market or improve
amenity
5. politics : mainly in the public sector.

The client aims to appoint a team which he can trust and rely on to reduce uncertainties
during a building’s design, construction and use. This is achieved by control of the
following :

1. the design :
a) by designing to a budget
b) taking advantage of contractor’s experience
c) avoiding excessive use of new systems
d) designing for buildability, safety and security
e) producing a good life expectancy and low maintenance
f) allowing flexibility for future change
g) employing environmental and energy efficient designs

2. the time :
a) by contractors accepting more responsibility for meeting completion dates
b) designers being more aware of the importance of complete info well in advance of
work on site

3. the cost :
a) by achieving realistic cost estimates and tenders which reflect the final cost
b) reducing risk of contractual claims stemming from poor documentation and late
receipt of info
c) avoiding delays which can cause loss of revenue and costly funding arrangements.

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Apportionment of risk

Risk can not be eliminated by choosing a particular form of contract, but will be shifted
towards one party or the other.

Design and build

This is an attractive option for clients. It simplifies the contractual links between the
parties to the main contract, because the contractor accepts the responsibility for
designing and constructing.

The benefits include :

1. single-point responsibility
2. prices which reflect more closely the final cost to the client
3. inherently more buildable designs
4. an overlap of design and construction phases leading to early completion.

Traditional with quantities

The employer (client) takes his scheme to an advanced stage with his professional team
before appointing a contractor.

Schedule of rates

A contract where the price is calculated from a schedule of rates has two major
problems :
1. the contractor is unable to identify the full extent of the work at tender stage – he is
thus unable to plan and accurately assess his overheads
2. the client will not know the full price of the work until the contract is complete.

Cost plus fee

A cost-reimbursement contract allows the contractor to claim all the prime cost of
carrying out the work on an “open book” basis and amounts are paid for site overheads
and the management fee. Although this arrangement has the benefit of a quick start,
there is little incentive to save time or costs by the contractor.

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APPORTIONMENT OF FINANCIAL RISK

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C. TENDER DOCUMENTATION

Documentation is the vital link between design and construction. Adequate and accurate
drawings and specifications are indispensable if the team is going to achieve success in
terms of quality, time and cost. Drawings are the primary means of communication. Poor
specification writing causes a weak link in the information chain and leads to disputes.
Another cause of friction is when BoQ differ from the drawings and specification. This
often happens when the QS is short of info from the designers.

It is the duty of the client’s team to advise the client that time spent beforehand in
settling details of the work required is essential if value for money is to be assured and
disputes leading to claims avoided.

If the contractor has enough info he can avoid guesswork, include all the important items
in his tender and will not need to add global sums for poorly defined elements of work.

COORDINATED PROJECT INFO

The following problems can be experienced with drawings, specifications and BoQ :
1. Missing info : not produce or not sent to site
2. Late info : not available in time to plan the work or order the materials
3. Wrong info : errors of description, reference or dimension, out of date info
4. Insufficient detail : both for tender and construction drawings
5. Impracticable designs : difficult to construct
6. Inappropriate info : not relevant or suitable for its purpose
7. Unclear info : because of poor drafting
8. Not firm : provisional info often indistinguishable from firm info
9. Poorly arranged info : poor and inconsistent structure, unclear titling
10. Uncoordinated info : difficult to read one document with another
11. Conflicting info : documents which disagree with each other.

DRAWINGS

Drawings are the most common means of communication for all types and sizes of
projects. Between architects, contractors, consultant engineers, etc there are four main
types of drawings commonly used in construction :
1. survey drawings : which are based on a measured survey and are used to produce
block and site plans
2. preliminary drawings : which are the designer’s early interpretation of the client’s brief
3. production drawings : include general arrangement drawings, layout drawings,
assembly drawings, standard details, schedules and additional detail drawings as
necessary. They are used for statutory approvals (council drawings), to invite
contractors to tender (tender drawings) and construction purposes (working drawings).

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4. record drawings : are used to show a record of construction as it has been built and
services installed (as-built drawings). These drawings provide essential info for
maintenance staff.

SPECIFICATIONS

A specification is prepared by an architect or consulting engineer to provide written

technical info mainly on the quality of materials and workmanship. The specification
would be a contract document in its own right if the contractor tenders on the basis of
drawings and specification only. Where BoQ are used for the building work, the
specification is included with the BoQ as preambles. In this way the specification again
becomes part of the contract documents.

There is a danger that specifications may be ignored by contractors, sub-contractors

and suppliers because they :
1. contain many standard clauses which are not relevant to the job
2. are usually too long
3. may be a collection of “protection” clauses, for example : “to the best quality”,
because the designer is not sure what quality to specify
4. are sometimes out of date.

BILLS OF QUANTITIES

The traditional purpose of BoQ is to act as a uniform basis for inviting competitive
tenders and to assist in valuing completed work. A contractor can also make use of the
BoQ in many ways :
1. to plan material purchasing (danger in ordering from BoQ – materials should rather be
ordered from drawn info and specification)
2. preparing resourced programmes
3. cost control during the contract to ensure work is within budget
4. data collection during construction for bonus systems and feedback info for
estimators.

Unlike drawings and specifications, there are rules for measuring building work
(Standard System for Measuring Building Work). BoQ for building are divided into the
following sections :
1. Preliminaries
2. Preambles
3. Measured work
4. Prime cost and Provisional sums

The preliminaries (general items) section gives general details about the project and
contract conditions, as follows :
1. description of the work, location of the site, site boundaries, names of parties
(consultants), and lists of drawings

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2. the form of contract used, with any amendments clearly defined, with contract
appendix details giving info such as the retention percentage, liquidated damages,
possession and completion dates and fluctuation provisions
3. specific requirements which should be priced by the contractor as fixed or time-
related items to reflect the actual costs arising from supervision, site accommodation,
temporary works, site running costs, general plant, transport, client’s requirements and
safety.

A contingency sum is often included in a bill as a provisional sum for unforeseeable

work, such as difficult ground conditions. The reason for its inclusion is not stated in the
bill and the sum is spent at the discretion of the architect or contract administrator.

A prime cost sum is provided in a BoQ for work to be carried out by a nominated sub-
contractor or for materials to be obtained from a nominated supplier. Work by statutory
authorities can also be given as a provisional sum. The term “prime cost” is also used in
connection with :
1. an allowance for the cost of a material such as bricks when the final selection has not
yet been made, for example Face brickwork PC R 2,500-00/1000 – the estimator must
be told how to deal with waste, transport and any other on costs.
2. the basic cost of labour, materials and plant in cost-plus arrangements such as
daywork contracts and some management contracts.

DOCUMENTS USED AS THE BASIS OF A TENDER

The basis of the tender will dictate the way in which the contractor will be paid and the
relative accuracy of the estimate. The contractor’s bid will be for one of the following :

1. Fixed price contract : where the sum of money is stated in the contract as payment for
work, the payment may be adjusted according to strict conditions in the contract.
2. Measurement contract : will allow the contract sum to be calculated later, usually as
the aggregate of various rates submitted by the contractor. The contract sometimes
include a target price.
3. Cost-reimbursement contract : an arrangement whereby the cost, whatever it may be,
will be paid by the client on the basis of the actual cost incurred by the contractor, plus
overheads and profit.

FIXED PRICE CONTRACT

The price is fixed in advance but is subject to variation under the terms of the contract.
This could include a fluctuations clause to pay for the increases caused by inflation.

Lump-sum contracts are the simplest type where a lump-sum offer is made by a
contractor to carry out the works, which might be outlined on drawings and described in
a specification but no quantities have been prepared. This is the usual for a small job
carried out by a local builder. The main advantage is the saving in time and money
needed to prepare a BoQ. The client will also have a reasonable estimate of the total
cost before the contract is signed.

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BoQ provide the most detailed basis for estimating cost. They present a clear list of
items included in the contract and a schedule on which variations may be valued. BoQ
give a fair basis for competition, and a firm contract sum is known in advance. The main
disadvantages are the time needed for accurate preparation of bills and the risk carried
by the client for quantities.

Bills of approximate quantities provide a fair basis for tendering when drawing details
are not complete. The bills will represent an estimate of the quantities of work in the
project. The work will be subject to remeasurement and a firm value will not be known at
the start of the project. This method is commonly used with refurbishment work where
the full extent of the work cannot be accurately determined.

MEASURED CONTRACTS

The total cost of a contract can be calculated by measuring the work as it advances on
site and pricing the measured items using the rates given in an agreed schedule of rates
or approximate BoQ. A schedule of rates lists all items likely to arise in a similar way to a
BoQ, but no quantities are included. A schedule of rates is also used with drawing and
specification contracts to value additional work.

COST REIMBURSEMENT CONTRACTS

The basis for this method is for the contractor to be repaid with the prime cost of
completed work as defined in the contract, and a management fee to cover overheads
and profit. The advantages of this method are : the project can start quickly, the
contractor can contribute to the design, competition can be introduced through the size
of the fee, and the contractor is unlikely to cut corners. The disadvantages may be : the
contractor has little incentive to save on time and resources, the client is unable to
predict the total cost accurately, and it can be tedious to calculate costs during the
construction stage.

FORMAL TENDER DOCUMENTS

1. Formal invitation
2. Bill of Quantities
3. Drawings
4. Form of Tender

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D. ESTIMATING METHODS

DEFINITION OF AN ESTIMATE

It is a prediction, by a qualified person, of the possible cost of a construction project, in

accordance with the specifications, to provide the client with a reasonable accurate idea
to what he/she will commit him/herself if he/she should decide to proceed with the
scheme.

Unit x Rate = Amount

The more comprehensive the unit, the more accurate the estimate.

To determine a price, we use data from previous jobs or experience. One needs lot of
info to price a project. What do we need to do an estimate?
- Data (records)
- Measurements
- Rates

The final cost of a construction project may be different from the estimate or forecast for
many reasons, namely :
1. The type of building – schools may be easier to predict than a bridge, the extent of
repairs in a maintenance contract can be difficult to foresee
2. The effect of competition in the market
3. The amount and quality of historical data available
4. The amount of design information available
5. The performance of the design team
6. The nature of the workplace – in terms of weather, ground conditions, resource prices
and other uncertainties
7. Changes introduced by the client
8. The estimator’s skill and method used.

METHODS OF ESTIMATING

1. Accommodation method
2. Area/volume method
3. Storey-enclosure method
4. Elemental method
5. Inclusive rounded off quantities

(PLEASE SEE ADDITIONAL NOTES)

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TYPICAL QUESTIONS

1. What is the difference between P&G’s and Overheads?

P&G’s : Site or project specific costs such as stores, toilettes, telephone, etc
Overheads : “Head” office costs like water and lights, telephone, salaries, rent, etc

2. The pricing of items and the estimating of items are dependant on each other. Explain
this statement.
The estimator must allow for prices for future projects based on info from prices on items
of current or historical projects.

3. Explain the fact that a large house often costs less R/m2 than a similar small house
(similar in structure, finishes, etc)
The influence of the so-called “expensive” rooms (bathrooms and kitchens). In both
large and smaller houses there are these “expensive” rooms that are part of the total
area with the rest of the area the “non-expensive” rooms like passages, bedrooms,
sitting, etc. Important to stress that a big house is more expensive than a small house,
but R/m2 could be cheaper.

4. Would you advise a contractor to purchase materials from the bills of quantities?
Motivate your answer by using items from at least four different trades.
No, bills are measured net (no waste, etc) – production, supervision, etc not taken into
account. Unit of measurement and unit of ordering and fixing could differ.
Concrete – quantity differs, shrinking, placing.
Brickwork – waste, sizes
Door frames – “hand” not measured
Floor coverings – waste (cutting, overlaps, etc)

5. What is needed to estimate a price?

- Materials
- Labour
- Waste
- Profit
- Overheads and Plant

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E. CONTRACTOR SELECTION AND DECISION TO TENDER

How does a company get new tenders in?

1. some enquiries arrive “out of the blue” arising from hearsay
2. advertising by the company
3. others are sent on the strength of earlier successful contract
4. a direct salesman approach can be followed
5. replying to invitations for open tenders
6. some opportunities can be created by speculation

The greater part of work carried out in the construction industry is secured through a
process of tendering which is intended to be an unbiased means of selecting a
contractor to carry out work. The client through an evaluation of his needs determines
the criteria for selection. The aims of selection are to find a contractor who can supply a
product for a competitive price, and can demonstrate the following :
1. a reputation for good quality workmanship and efficient organization
2. the ability to complete on time
3. a strong financial standing with a good business record
4. the expertise suited to the size and type of project
5. an understanding of the requirements of the scheme in terms of the type of work, the
quality expected and the need to achieve target completion dates.

The construction industry is rarely concerned with providing off-the-shelf products. Most
projects involve unique designs, with purpose-written specifications to be finished in a
time which is often difficult to predict. Construction clients must balance the importance
of cost, quality and time because it is rare for all three to be satisfied. A client can
reduce the financial risks by fully designing the project before selecting contractors.

It is not only clients who need to establish the financial standing of the other party. The
contractor will have to be satisfied that the client has the ability to pay, and on time.

COMPETITION AND NEGOTIATION

Contractors may be selected by competition or negotiation and sometimes by a

combination of both. Open competition is an arrangement where an advertisement in
local newspapers or trade journals invites contractors to apply for tender documents. A
deposit is usually required to ensure that only serious offers are made – presumably it is
needed to cover the cost of copying the documents. Open tendering often leads to
excessive tender lists where the cost of abortive tendering is considerable. There are
instances of selection criteria being applied after the tender has been submitted, so a
bid could be rejected if a contractor does not belong to an approved trade association,
for example, after he has submitted his tender.

Selective tendering consists of drawing up a list of chosen firms and asking them to
tender. It is by far the most common arrangement because it allows price to be the

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deciding criterion – all other selection factors will have been dealt with at the pre-
qualification stage. There are three ways in which selective tendering lists are drawn up:
1. an advertisement may produce several interested contractors and suitable firms are
selected to tender
2. the consultants may contact those they would wish to put on an ad-hoc list
3. many local authorities and national bodies keep approved lists of contractors in
certain categories, such as work type and cost range.

Contractors who ask to be included on select lists of tenderers are usually asked to
provide information about their financial and technical performance, particularly about
the type of work under consideration and mainly with projects carried out during the
previous three years.

There are a number of well-defined stages for pre-selection and tender stage actions.
Their success relies on complete designs before tenders are invited and the use of
standard forms of contract but can be used with other procurement systems.

1. Preliminary enquiry : contractors are given the opportunity to decide whether they
wish to tender by receiving a preliminary enquiry letter, four to six weeks before the
dispatch of tender documents.

2. Number of tenderers : the recommended number of tenderers is a maximum of six

and further names could be held in reserve.

3. Tender documents : the aim of the documents is that all tenders will be received on
the same basis so that competition is limited to price only.

4. Time for tendering : normally at least four working weeks should be allowed, and
more time may be needed depending on the size and complexity of the project.

5. Qualified tenders : tenderers should not try to vary the basis of their tenders using
qualifications. Queries or unacceptable contract conditions should be raised at least 10
days before tenders are due. The consultants can then tell all the tenderers of their
decisions and if necessary extend the time for tendering. A contractor should be asked
to withdraw significant qualifications or else face rejection. This is necessary to ensure
tenders are received on a like-for-like basis.

6. Withdrawal of tenders : a tender may be accepted as long as it remains open – a

definite period is usually stated in the tender documents. The tenderer may withdraw his
offer before its acceptance.

7. Assessing tenders : the tenders should be opened as soon as possible after they are
received. Priced bills may be submitted in a separate envelope by all the contractors, or
more likely only the bills of the lowest tenderer will be called for and submitted within
four working days. Once the contract has been let, every contractor should be issued
with a list of tender prices. Alternatively tender prices should be given in ascending order
and the names listed in alphabetical order.

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8. Examination and adjustment of priced bills : the PQS will treat the information in the
tender documents as confidential and report errors in computation to the architect and
client. There are two methods for dealing with errors. Alternative 1 gives the tenderer the
opportunity to confirm his offer or withdraw it. Alternative 2 allows the contractor to
confirm his offer or amend it to correct genuine errors. If the contractor amends his offer
with a revised tender which is no longer the lowest, the tender of the lowest will be
considered.

9. Negotiated reduction of tender : there may be a need to look for savings in the cost of
a project where the tender exceeds the employer’s budget. This can be achieved by
negotiation with the lowest tenderer, or the next lowest if negotiations fail.

When a contract is negotiated, a contractor is often selected on the basis of past

performance, recommendation, familiarity with the work, or from previous experience
with the client or his advisers. Negotiation allows early contractor selection where the
extent of work is not fully known and time is of the essence, and more time would be
wasted in preparing full tender documents.

The process of negotiation starts with an outline design and a pricing document such as
a bill of approximate quantities. The contractor will insert rates which will be agreed by
negotiation between the PQS and contractor’s QS or estimator. Without competition the
initial price may be higher than would be gained by other means, but this may not be a
serious problem. An employer is often looking for other factors such as confidence,
reliability, speed and experience of working with a known contractor.

Serial tenders allow a number of similar projects to be placed with a particular contractor
and thereby provide the incentive of a continuous flow of work. The contractor is
normally selected using a priced master bill. Separate contracts for each individual
project can then be arranged using the priced master bill as a basis for pricing levels.

ABUSE OF TENDERING PROCEDURES

It is accepted that all those involved in tendering will use fair and efficient methods which
are the best and most professional techniques in use today. The prime aim is to select
the right contractor who will give the client good value for money. Unfortunately
individual interests and lack of time can stand in the way of good practice, and parties to
a contract are often unclear about the true nature of the agreement. Some of the
problems faced by the estimator are :

1. Large tender lists : Open competition has been widely critized in the construction
industry, but it continues to be used mainly by local authorities. They argue that there
cannot be the suspicion of favouritism and the lowest possible price will be secured.
There should be a sensible number of competent firms selected who can comply with
the quality and time requirements. With the high costs of tendering in mind, many
reputable contractors will not willingly take part in open tendering, particularly where the
client has been known to receive tenders from over 30 contractors.

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2. Short tender periods : The time for tendering should be determined by three factors :
the size of the project, the complexity of the project and the standard of the documents.
In fact the longer the tender period, the more likely it is that the contractor will find
savings which would increase the possibility of winning the contract and may produce a
better price for the client. The estimator will try to respond to short tender periods by
telephoning his enquiries to suppliers and sub-contractors, making use of information
from previous jobs, manually or with the help of a computer. The depth of the analysis
will be reduced, there is a greater risk of errors and the price is likely to be highrt to
cover for such problems.

3. Tender documentation : The estimator should receive enough drawings to understand

the nature and scope of the works. The minimums needed are elevations and floor plans
to measure temporary works (such as scaffolding), site plans to consider materials
access and distribution and component drawings where non-standard elements are to
be priced. References to brand names and specialist suppliers should include current
telephone numbers and addresses. Info must be provided about any restrictions which
might affect the contractor’s choice of method. The site investigation report should be
sent to each contractor. Estimating without bills of quantities is much more time
consuming, not only because so much time is needed to take off quantities, but
enquiries to sub-contractors are delayed and the risk of errors is greater.

4. Asking for tenders when the work is unlikely to proceed : There is a tradition in the
construction industry for estimates to be given without charge to the client. This can be
at great cost to unsuccessful contractors. Contractors will accept this financial risk
providing they are submitting tenders to clients who use selective tendering and
eventually award a contract to one of the bidders.

5. Qualified tenders and alternative bids : The tenderer should submit his bid without
adding conditions to his offer. The need should be recognized for a common basis from
which the best bid can be selected. Contractors may produce an improvement to design
or see a method for completing quicker, and often can calculate an alternative price.
Providing an offer is made which complies with the original brief, alternative tenders are
considered by employers.

6. Failure to notify results : A contractor can monitor his tender effectiveness when he
receives info about his performance in relation to other tenderers. Tender prices should
be published if a contractor is to review his suitability for the type and value of projects.
Clients are becoming increasingly reluctant to publish figures because the lowest
tenderer could attempt to recover the difference in value between his tender and the
second lowest, either before the contract is awarded or later during the construction
period. Contractors commonly ask for a briefing on their performance, but will not be told
the other tender sums.

7. Late receipt of tender documents : Estimators do their best to deal with requests for
tenders sometimes at short notice, but when tender documents arrive later than
promised their programme of work will be affected, and other opportunities to tender
may be harmed. It has become common practice for tender submission dates to be held
firm regardless of how late the tender documents are dispatched.

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DECISION TO TENDER

The decision to tender should be made by the chief estimator or general manager using
the following points :

1. Is the work of a type which the contractor has experience, both in winning tenders and
completing profitably? Does it conflict with the company’s objectives and future
workload?

2. How many contractors will be invited to tender?

3. Has the contractor the necessary supervisory staff and labour available – he may not
wish to recruit untried and unknown personnel in key positions?

4. Will the estimating department have the staff available with suitable experience for the
type of work to be priced?

5. Does the location of the proposed site fit the organization’s economic area of
operation?

6. Are there too many risks in the technical and contractual aspects of the project?

7. Will suitable documents be produced for tender purposes? A busy estimating office
may give priority to work that has been measured. Poor documentation might give a clue
to the standard of working documents during construction.

8. Has enough time been given to prepare a sensible estimate?

9. What will be the cost of preparing the tender? A contractor might limit the number of
design and construct tenders, for example, in order to limit has exposure to cost. In the
majority of cases, these costs are not recoverable.

As a client needs to establish the contractor’s financial standing, so in turn the contractor
will need to be satisfied the client has the ability to pay, and on time. The contractor will
also need to consider his previous experience of working with the architect, engineer or
quantity surveyor. A contractor having signified initial agreement to tender, should
honour that acceptance except in exceptional circumstances.

INSPECTION OF TENDER DOCUMENTS

On arrival the tender documents should be passed directly to the estimating department.
These documents should then be checked by the chief estimator (the individual who
takes the responsibility for the estimate, not the estimator who will b e appointed to deal
with the task) that they accord with those listed in the letter of invitation :

1. Two copies of the bills of quantities

2. Two copies of the general arrangement drawings
3. Two copies of the form of tender
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4. Addressed envelope for the return of tender and priced bills if applicable.

If the documentation is not complete the fact should be reported immediately by

telephone. If reference is made in the letter that certain sections of the bills will follow
shortly and the tendering time is as stated in the preliminary invitation, an appeal should
be made for a revision of time. The time for tendering should be calculated from the date
of issue of the last section.

The preliminary sections of the bills need to be examined carefully, in particular the
general and contractual conditions called for. The drawings from which the bills were
prepared should be listed and drawing number references should match those recorded
in the list.

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F. ENQUIRIES TO SUPPLIERS AND SUB-CONTRACTORS

Contractors have developed procedures to ensure that tenders are based on up-to-date
prices for materials and specialist services. Enquiries to suppliers and sub-contractors
must be sent promptly but not at the expense of accuracy. Wrong or incomplete info will
lead to delay in receiving comparable quotations. An orderly presentation will do much
to avoid mistakes. Most enquiries consist of photocopies of the relevant pages from the
bills of quantities with a letter and any related drawings. Ideally those bill items which are
not to be priced, should be crossed out to avoid confusion. With computer-aided
estimating systems, a sub-contractor bill of quantities can be generated by choosing
only those items relating to a trade package.

In the past estimators and buyers have kept lists of companies who can supply materials
and services in trade order. With computers, databases can be searched for trade
contractors and suppliers within traveling distance of the site.

When tendering in an unfamiliar location, the estimator must allow time when visiting the
site to tour the area and take note of the volume of work going on and what stage
individual jobs have reached. Site hoardings which list the sub-contractors being used
on a site are a valuable source of information about specialists who are acceptable to
your competitors. Another useful starting place for obtaining names is the local
newspaper. Especially when the newspaper has printed a special promotion naming
various sub-contractors linked to the completion of a local building.

ENQUIRIES FOR MATERIALS

Each construction company has a standard form of enquiry for suppliers. Enquiries
should give the following info :

1. Title and location of the work – some suppliers complain that enquiries from different
contractors are received in varying formats, often making it impossible to decide whether
they are for the same job.

2. Description of the materials, supported by specifications

3. Approximate quantities – so that bulk discounts can be quoted

4. Date by which the quotation is needed – seven to ten days would seem reasonable,
although those with complex fabrication work to price (eg joinery suppliers) may need
longer. The most successful approach where time is limited is to say so, and request co-
operation by responding as soon as possible.

5. Name of the estimator dealing with the tender

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6. The contract period with a guide to the dates for deliveries – it can only be a guide
because the start date is rarely known and the construction programme is not yet
available

7. Whether firm price or fluctuating price

8. Minimum discount terms required

9. Any limitations on access to the site

ENQUIRIES TO SUB-CONTRACTORS

There are three kinds of domestic sub-contractors who will be approached at tender
stage.

1. conventional subbie – who provides a complete service

2. labour-only subbie – who are supplied by their materials and plant
3. labour and plant subbie – who receive their materials from the main contractor

Sub-letting work to specialists is an attractive arrangement for contractors because

much of the technical and financial risk is passed to another party and profit is almost
guaranteed.

Details to be given in the contractor’s enquiry letter to the subbies are as follows :

1. Site address and location (with a map if necessary)

2. Name of employer and professional team
3. Relevant details of main and sub-contractor
4. Any amendments to the standard conditions, including bonds and insurances
5. A request for daywork rates
6. Date for return of quotations
7. General description of works
8. Details of access, site plant and other facilities available
9. Where full contract details and drawings can be inspected
10. Contract period, programme and any phasing requirements
11. Any discounts to be included
12. Two copies of relevant sections of the bills of quantities
13. Copies of drawings and schedules where applicable
14. Services and attendances to be provided by the main contractor
15. A clear statement of how fluctuations will be dealt with

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G. TENDER PLANNING AND METHOD STATEMENTS

The estimating team will consider construction methods and employ planning
techniques to :

1. Highlight any critical or unusual activities

2. Examine alternative ways of tackling the work
3. Calculate optimum durations for temporary works and plant
4. Reconcile the labour costs in the estimate with a programme showing resources
5. Determine the general items and facilities priced in the preliminaries section of the bill
6. Check whether the time for completion is acceptable

TENDER PROGRAMMES

The tender programme will fix an overall time for the project from which the estimator
can determine times for sections of work in main stages such as :
1. design and mobilization
2. sub-structure
3. independent structures
4. superstructure
5. engineering services
6. internal trades, finishes and fixtures
7. external works

Information about these periods is essential to the estimator, enabling him to calculate
times for :
1. staff requirements
2. site accommodation
3. mechanical plant and equipment
4. temporary works such as formwork and scaffolding
5. increased costs for firm-price tenders
6. work affected by the seasonal weather changes such as drying out buildings, heating,
protection and landscaping

The overall section durations can be used to check workforce levels and items of plant
such as excavators and cranes that often remain on site for continuous periods. There
may be times of excessive demand for plant and labour, which will call for a leveling
exercise to balance resource needs.

The number of working hours needed are established. Then a duration is calculated by
dividing by the number of productive hours in a week and the number of labourers for a
specific trade (eg bricklayers). The programme will dictate the number of gangs
required. Most activity durations can be derived from the product of quantities and
standard outputs.

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The tender programme must allow for recognized public/industry holidays, inclement
weather and the peak summer holiday period which leads to a slowing of progress
which may be reflected in output.

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H. RESOURCE COSTS – LABOUR, MATERIALS AND PLANT

LABOUR RATES

During the first half of the twentieth century, builders calculated labour rates by looking
at weekly costs. This was a little easier to do but lacked the precision of the current
methods. The main reasons for calculating costs and hours on an annual basis are :
1. to include the effect of annual and public holidays on the number of hours for payment
2. overtime working often depends on the proportion of summer and winter working,
because longer working hours are available and used in the summer period.

The estimator needs to be aware of some of the difficulties associated with calculating
labour costs and should answer the following questions :

1. Are there enough skilled operatives in the area? If not, will they need to be paid
increased rates to work on the site or is there a need to import labour from outside the
area?

2. How many operatives will be paid traveling expenses and will any key people receive
a subsistence allowance?

3. Will there be any local union agreements which affect the wage levels?

4. Will bonus payments and enhanced wages be self-financing?

MATERIAL RATES

Quotations should be obtained for all materials, not only because prices can fluctuate
unpredictably, but also because the haulage rates to various sites could be different,
depending on their distance from the supplier. The size of the loads can dramatically
affect the transport costs. The following factors are considered by the estimator in
building up the material portion of a unit rate :

1. Check the materials comply with the specification – the estimator may consider the
use of an alternative product if it is cheaper and from experience is a satisfactory choice
that will be accepted by the client

2. The supplier may want payments for the costs of transport or small load charges.
Ready-mix concrete suppliers impose extra payments for part loads. The cost can be
significant and must be considered where small concrete pours are expected.

3. Some products are manufactured in fixed sizes that are the minimum that can be
ordered. An estimator may have received a price per m for pipe for a job which needs
only 15m. If the minimum coil size is 30m then the estimator must consider the likelihood
of using the pipe on another site that might involve a storage cost. Alternatively it might
be more realistic to allow waste in the rate for this tender.

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4. The quantity required for each unit of work must be considered for each material.
Estimators should keep a note of the conversion factors they need for commonly used
materials. For example a ½ brick wall have 55 bricks per m².

5. Unloading and distributing materials are activities that can be priced in the unit rate
calculation or dealt with as a general site facility in the project overheads. Often a
combination of both is needed. For example with facing bricks the price for bricks will
include the cost of mechanical off-loading, whereas distributing bricks around the site
could be catered for by including a forklift and a distribution gang in the project overhead
schedule.

6. If the specifications or preliminaries clauses call for samples of certain materials the
estimator needs to escertain the cost. Usually a supplier will provide samples without
charge. Testing of materials on the other hand is usually undertaken by an independent
company and as such must be specified or preferably included as an item in the bill of
quantities. The cost of testing will be essessed when the overheads are calculated.

7. An allowance for waste is difficult to estimate. The standard methods of measurement

state that the work is measured net as fixed in position and the contractor is to allow for
any waste and square cutting and overlapping of materials. It is also stated that the
quantities shall be calculated net using dimensions from the drawings and that no
allowance shall be made for bulking, shrinkage or waste. The estimator needs to
consider the following :

a. is there a selection process needed on site to achieve the quality specified – picking
face bricks to produce a specific pattern?
b. are the materials likely to suffer damage in the off-loading and handling stages?
c. is the design going to lead to losses in cutting standard components to fit the site
dimensions?
d. is the site secure from theft and vandalism?
e. will the finished work be protected from damage by following trades?
f. has the company had previous experiences with the materials?
g. will some materials be used for the wrong purpose – such as using face bricks below
ground level to avoid ordering a few cheaper bricks?

PLANT RATES

The plant supply industry can provide a wide range of equipment. It can offer hire or
outright purchase, and in some cases lease and contract rental schemes. The following
steps can be taken at tender stage to assess the mechanical plant to be used :

Step 1 : Identify specific items of plant needed by looking at quantities and methods.
The machine capacities can be found by assessing the rates of production required.
Examine the tender programme for overall durations.

Step 2 : Obtain prices – the sources of plant are :

a. purchase for the contract
b. company-owned plant
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c. hire from external source

In practice the sources of prices are :

a. calculate from first principles
b. internal plant department rates
c. hirer’s quotations
d. published schedules

Step 3 : Compare plant quotations on equal basis perhaps by using a standard form.

Step 4 : Calculate the all-in hourly rate for each item of mechanical plant. The main parts
of the calculation are :
a. cost of machine per hour (including depreciation, maintenance, insurances, licences
and overheads)
b. all-in rate for operator (the operator may work longer hours than the plant because of
the time needed for minor repairs, oiling and greasing)
c. fuel and lubricants (the amounts of fuel consumed will depend on the types and sizes
of plant, the average consumption during the plant life is used)
d. sundry consumables (any costs beyond “fair wear and tear”)
The cost of bringing plant to site is usually dealt in assessing project overheads
(preliminaries) when the transport of all plant and equipment is considered.

Step 5 : Decide where to price plant – either in the unit rate against each item of
measured work or in the project overheads. Plant that serves several trades should be
included in the project overheads, such as cranes, hoists, concrete mixers and materials
handling equipment. Estimators also price the erection of fixed plant in the project
overheads together with the costs of dismantling plant on completion.

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I. UNIT RATE PRICING

COMPONENTS OF A RATE

Unit rates are usually a combination of rates for labour, plant, materials and sub-
contractors. Only the direct site costs is included because management will develop a
better understanding of the pricing level if on-costs are dealt with separately.

The estimator must think about the way in which each operation will be carried out. The
following factors must be considered in calculating the cost :

1. Quantity of work to be done

2. Quality of work and type of finish specified
3. The degree of repetition

It is important to remember that the items in the Bill of Quantities are measured nett and
that the estimator must allow for everything necessary in the rate to carry out the item.
For example when working space is measured to excavations, the contractor is to allow
for additional earthwork support, disposal, backfilling, work below ground level and
breaking out.

The way in which unit rates are built up differs from company to company and between
trades. For example calculations for earthworks are based on the use of plant, formwork
on the other hand depends on the making and re-use of shutters.

TYPICAL QUESTIONS

Question 1
Name and discuss the factors from which a rate for an item is usually made up.

Material
Labour
Plant, equipment
Overheads
Profit

Question 2

Discuss briefly the elements which can contribute to the costs of a project.

1. the plant cost

2. the labour cost
3. the material cost
4. establishment charges

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5. labour insurances
6. incidental insurances
7. payments lost due to inclement weather
8. water for the works
9. the haulage of plant
10. the offices for the architect or engineer
11. site offices for the builder or contractor
12. watching and lighting
13. the control of traffic and the additional cost involved
14. temporary roads and hoardings
15. the contract guarantee bond
16. building fees
17. provisional sums and prime cost amounts
18. transport to men and traveling time paid to the men
19. subsistence allowances paid to the men

Question 3

Discuss briefly the types of material waste.

1. conversion waste : when cutting small timber scantlings from baulks of timber or logs

2. cutting waste : when sheet materials have to be cut for a specific component e.g.
plywoods, blockwoods, plasterboard, felt.

3. application waste : occurs with most wet building materials such as plaster and other
finishes; the term can be extended to wastage on many other materials such as bricks,
tiles and timbers cut to length.

4. stockpile waste : when most loose materials are dispersed on the site because of
partial use, e.g. aggregates, sand, etc

5. residue waste : occurs with paints, glues and other materials which are normally
delivered in containers and are never completely used.

6. transit waste : occurs with brittle materials which break in transit such as slates and
tiles.

Question 4

Explain how an estimator could calculate the costs of the following preliminary items :
a. small plant
b. setting out of work
c. site accommodation

a. Allow for use of circular saws and hard power tools, trestles, ladders, picks and
shovels, buckets and wheelbarrows, hosepipe, etc. Usually computed as a percentage
26
on the net cost of the tender. If scaffolding is separately calculated, the percentage will
then be between 0.2% and 0.4% according to turnover, i.e. a larger percentage for
smaller jobs. Alternatively a rate per week per item multiplied by contract duration in
weeks or anticipated time of use. This last method is cumbersome and time consuming
but will be more conducive to accuracy in pricing this item.

b. On inspection of the drawings the estimator must decide on the number of profiles –
leveling pegs and similar items required – and calculate the cost of all the materials
involved. In terms of the anticipated duration of the setting out operation and the wages
paid to the operatives engaged, the labour costs are calculated. The cost of supervision
will usually be excluded and priced with general site supervision elsewhere. The cost of
surveying instruments e.g. dumpy levels, theodolites, etc. will usually be included in
general overheads and could be ± 0.1% of the contract value depending on simplicity or
complexity of the layout.

c. Appropriate offices must be provided for site staff. The original cost of sectional sheds
or offices are depreciated over yeats of expected use (5 to 10 years). The contract will
normally include charges for transport, erection, repair, maintenance, dismantling and
removal.

Question 5

Briefly discuss the difference between “overheads” and “P&G’s”.

Preliminaries are costs on site that can’t be distributed between the trades, such as
crane operators or telephone accounts.
Overheads are monthly costs at head office, such as rent or telephone accounts.
In small companies these two costs can be intertwined, but in large companies it is
essential to separate these two costs.

Question 6

Explain the difference between :

a. Provisional sum
b. Provisional measured work
c. Provisional Bill of Quantities
d. Preliminaries
e. Prime Cost item
f. Contingency Sum

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J. SUB-CONTRACTORS AND NOMINATED SUPPLIERS

Sub-contractors can be classified in two main categories : nominated and domestic sub-
contractors.

DOMESTIC SUB-CONTRACTORS

Great care must be taken when estimating on the basis of sub-contract quotations
because the contractor takes responsibility for all the work. It is therefore for all parties
to ensure that quotations are based on accurate and complete info. All sub-contract
quotations should be checked for arithmetical errors and totaled. To compare them on a
like-for-like basis the following checks are carried out by the estimator :

1. All the items for that trade should be priced. If there is enough time the subbie should
be asked to provide missing rates, otherwise the estimator needs to insert his own
estimate of their value.

2. The rates should be realistic. If a patent error is detected then the subbie should be
advised to amend his quotation and tell all the main contractors who have received it.

3. It is sometimes argued that rates should be consistent throughout the BoQ – like
items should be priced at similar rates to avoid possible difficulties when valuing
variations. Anyone vetting a tender must realize that the cost of similar items may vary
depending on quantities, location, timing and so on.

4. The subbie should accept the contract conditions without amendment. This will
enable the estimator to make fair comparisons between quotations and avoid any
misunderstandings brought about by qualified bids. In practice, quotations are sent with
many printed and specific conditions which may conflict with the enquiry documents.
These details are often resolved at the negotiation stage.

5. The quotation should be based on the documents that form the main contract. The
estimator should not accept a lump sum quotation for work, which will be valued on the
basis of an approximate bill of quantities or accept a schedule of rates for a plan and
specification project. If a subbie has altered the tender documents, there may be a
mistake which should be brought to the attention of the client so that all the contractors
will correct the bill before the tenders are submitted.

6. There is a growing tendency for subbies and suppliers to retype the boq usually to
accord with their interpretation or individual product range. The estimator must be sure
that any changes do not represent a significant change to the contract requirements.

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A computer can be a great help in comparing subbie quotations. Computer-aided
estimating packages offer more powerful facilities :

1. the software will prompt the estimator by showing items that the subbie should have
priced
2. average rates can be inserted automatically when one of the subbies fails to price an
item
3. the chosen list of rates can be incorporated in the estimate at the touch of a button.

This assumes the estimator wants to insert the rates as they stand. In some cases a
lump sum may be added to certain rates or a percentage may be applied to others. The
main reasons for changing the subbies’ rates are :

1. The subbie might need specific builder’s work not measured elsewhere, drilling holes
through the building fabric being the most common example.

2. An estimator might decide to add certain attendances to the measured rate, such as
scaffolding for an industrial door installer.

3. There may be specific trade requirements, which are customarily provided by the
contractor. For example a piling firm may ask for surplus soil to be removed by the main
contractor, and a plasterer often expects the free use of a mechanical mixer.

4. Site overheads may be given as a separate item by a subbie. In this case the
estimator might wish to spread this sum across the net rates.

5. A margin for overheads and profit could be added to all or some of the rates; either
because the contractor wishes to spread his overheads through the bill or for tactical
reasons, such as work which appears to be undermeasured.

NOMINATED SUB-CONTRACTORS

A nominated sub-contractor or supplier means a person with whom the contarctor is

required to enter into a contract for the execution of work or the supply of things
designated as “prime cost” or “PC” items. The following info must be given in the tender
documents for each nominated subbie :

1. The nature and construction of the work

2. A statement of how and where the work is to be fixed
3. Quantities which indicate the scope of the work
4. Any employer’s limitations affecting the method or timing of the works
5. A prime cost sum
6. General attendance item
7. An item for main contractor’s profit to be shown as a percentage
8. Details of special attendance required by the subbie

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NOMINATED SUPPLIERS

A nominated supplier is normally identified in the tender documents as a prime cost

sum. A separate item is given for the contractor to add his profit. Usually the nominated
supplier should allow the contractor a discount for cash of 5%. Many contractors take
out this discount before final review so that the nett costs can be considered before
considering the mark-up required to convert the estimate to a tender.

Fixing materials provided by nominated suppliers is measured in the appropriate part of

the bill of quantities. Rates for fixing must include unloading, getting-in, unpacking,
return of empties and other incidental expenses.

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K. FLUCTUATIONS

In most cases contractors must allow for changes in costs that occur during the
construction phase. The amount which the estimator adds to the estimate for inflation is
a guess, calculated after an examination of price trends over the previous few years,
and discussions with suppliers and sub-contractors, in an attempt to predict future
trends. If a contract is likely to last for several years then the employer will request a
tender based on current prices and any changes will be reimbursed using the methods
defined in the contract.

The standard forms of contract have terms for either a firm or fluctuating price. A firm
price is one which will not be varied for changes in the cost of resources, although
labour tax fluctuations are usually reimbursed by the employer. An estimator needs to
understand the clauses dealing with fluctuations so that he can tell the sub-contractors
of the risks and calculate his own forecast of increased costs. In a fluctuating price
tender the price is agreed before the job starts but the contract sum can be adjusted for
changes in the costs of resources. (Haylett)

L. PROVISIONAL SUMS AND DAYWORKS

PROVISIONAL SUMS FOR UNDEFINED WORK

Where the employer identifies there is likely to be extra work for which there is no
information at tender stage or it cannot be measured using the standard method of
measurement, a provisional sum can be provided in the BoQ. The sum is spent at the
direction of the architect and the work is valued in accordance with the valuation rules.

There are two kinds of undefined provisional sum :

- a comtingency sum which is for work which cannot be identified at tender stage,
usually for unforeseen circumstances
- sums for specific items the extent of which is not known, such as more landscaping to
a courtyard which has not been agreed with the client.

The contractor adds these provisional sums to his tender after he has calculated his
preliminaries and profit margin. The contractor is entitled to any reasonable allowance
for programming, planning and preliminaries. This is not just a financial compensation.
The expenditure of a provisional sum may lead to claim for extension of time. This
means that the estimator does not include provisional sums when planning the work.

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PROVISIONAL SUMS FOR DEFINED WORK

There are certain items of work which cannot be measured using the standard method
but could be taken into account by the contractor when he draws up his programme and
calculates his project overheads (preliminaries). It could be argued that a proportion of
the provisional sum will be used to pay for head office overheads and profit. A simple
example would be providing a concrete access ramp for wheelchairs.

Contractors must be given more info about work in this category so that all the
temporary works and overheads can be calculated. The question is : How much info
must be given in the BoQ for a provisional sum for defined work?

The following must be provided :

1. the nature of the work
2. how and where it is to be fixed
3. quantities showing the scope and extent of the work
4. limitations on method, sequence and timing.

Estimators have experienced problems with BoQ’s with provisional sums for defined
work where the full extent of the temporary works is not clear. A typical case would be a
provisional sum to replace defective windows in a multi-storey building. What
assumptions should the contractor make for scaffolding? The defective windows could
be found at high level, lower levels or throughout the building.

DAYWORKS

Construction contracts often involve changes from the original scheme. The term
“variation” means alteration of the design, quality or quantity of the works, and can
include changes in sequence or timing of works. Where a variation occurs, the cost of
the original work is deducted and new work is measured and priced by the quantity
surveyor or engineer. The value of variations is determined according to the rules set
out in the conditions of contract. One method is by measurement using bill rates or a fair
allowance added to the bill rates or by fair rates and prices (quotes). Where the work
cannot be valued by measurement, it may be valued on a daywork basis, provided it is
incidental to contract work. In practice, contractors are often asked to attach a value to a
variation before the varied work is started and in some cases a term is incorporated in
the contract so that agreement is reached before the work is carried out.

The standard form of a building contract states that where the valuation relates to
additional or substituted work which cannot be properly valued by measurement the
valuation shall comprise :

- the prime cost of such work together with percentage additions to each section of the
prime cost at the rates set out by the contractor in the contract bils.

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M. PROJECT OVERHEADS (PRELIMINARIES)

The preliminaries bill gives the contractor the opportunity to price project overheads.
Project overheads are defined as “the site cost of administering a project and providing
general plant, site staff, facilities and site-based services and other itmes not included in
all-in rates”.

PRICING PROJECT OVERHEADS

For small repetitive works a contractor or sub-contractor may have a scale of overheads
which he can apply to a new project. This may be calculated as a percentage of annual
costs and adjusted where jobs deviate from the norm. Typically the site and office
overheads for small houses and extensions may be 15%, and for sub-contractors who
have facilities provided by main contractors the figure would be nearer 10%.

Traditionally in building, estimators have allowed for attentand labour, non-mechanical

plant and certain items of mechanical plant in the rates inserted against measured work.
It is becoming more common for these items to be considered as part of the general site
overheads because very often these facilities are available to all trades and should be
assessed using the tender programme.

A typical sequence of events for pricing project overheads is :

1. Make notes of general requirements, such as temporary works and sub-contract

attendances, when pricing the bill.

2. Prepare a site layout drawing showing the position of accommodation, access routes,
storage areas, and services. Inspect site features and check feasibility of proposals
during site visit.

3. Use the tender programme for planning staff, plant and temporary works
requirements.

4. Read the client’s specific requirements and all the tender documents.

5. Price the project overheads sheets.

It is essential that the contractor has standard sheets which give all the main headings
for pricing project overheads. He cannot depend on the descriptions given in the tender
documents because they are not necessarily complete. For large projects, contractors
will obtain quotations for temporary facilities such as :
- site accommodation
- temporary electrics
- scaffolding
- carnage.

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PRICING THE PRELIMINARIES BILL

It is recommended that “fixed”, “time-related” and “value” charges are identified

separately in a BoQ.

1. A “fixed” charge is for work the cost of which is to be considered as independent of

duration of the contract.

2. A “time-related” charge is for work the cost of which is to be considered as dependent

on duration of the contract.

3. A “value” charge is for work the cost of which is to be considered as dependent on the
value of the contract.

There are items that are difficult to allocate such as the use of specialist plant. A crane,
for example, may be on site for two weeks; should this be classed as a fixed or time-
related charge? For many schemes, all general plant and facilities are divided by the
duration to produce equal sums for monthly payments.

Similarly the staff costs are difficult to share between valuations because they are
usually higher at the beginning of a contract and taper off gradually towards the end.
Staff costs are often incurred before the start date, when mobilization activities – such
as procurement of initial packages – take place.

When the estimate has been reviewed by management the estimator will allocate sums
of money to the preliminaries bill. This is an opportunity to ensure that a satisfactory
(and possibly positive) cashflow position is secured. In particular the contractor needs to
identify setting-up costs that should be claimed in the first valuation as fixed charges. If
all site and general overheads were reimbursed in proportion to time the contractor
would have more expenditure than income and this poor cashflow position would persist
during most of the contract duration.

The early fixed charges often include :

Employer’s requirements
- accommodation
- furniture
- install telephone
- provide equipment
- transport charges

Supervision
- hotel expenses
- planning
- procurement

Services
- installation charges
- office equipment
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Mechanical plant
- transport of plant
- purchase of plant

Temporary works
- design and purchase of structures
- access routes and hardstandings
- enclosures
- dewatering, piling and formwork

Site accommodation
- transport and cranage
- purchase costs
- foundations and furniture
- erection and fitting out

Contract conditions
- insurance premium
- bond
- professional fees
- initial land/building surveys

Non-mechanical plant
- scaffold erection
- small tools and equipment

Miscellaneous
- setting-out consumables
- samples
- quality planning
- protective clothing

The costs of dismantling site facilities and cleaning are much smaller by comparison and
are rarely priced as separate fixed charges.

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